Top Dividend Stocks #5: Chevron (CVX)
Dividend Yield: 3.49%
YTD Performance: -8.33%
52-Week Return: 1.47%
Kicking off our top 5 dividend stocks, Chevron (CVX) recently became the center of some negative attention after a worker was killed by an accident at one of CVX’s natural gas drilling rigs in Pennsylvania.
If that wasn’t bad enough, the company then created a media frenzy when, in a PR move to compensate the community for the tragedy that occurred, it offered coupons for a free pizza and bottle of soda to citizens of the affected town.
Although the move was clearly made in poor taste and executed without proper judgment, the event has had little effect on shares of CVX. After posting a 2013 return of more than 17%, the stock got off to a bumpy start this year. In fact, CVX started trading lower more than a month before the term “pizza apology” was first uttered.
The decline from the $125 area began back in January when CVX forecast that its fourth-quarter numbers would likely miss expectations, which is exactly what happened. Chevron posted a massive 32% year-over-year decline in earnings, as well as quarterly revenues that were down almost 4% from the same quarter a year earlier.
However, for those long-term investors looking to buy the dip, the good news is that the company pays out a very solid dividend yield of 3.5%. And despite the recent incident, Chevron stands to benefit greatly from the collection of the vast amount of natural gas that can be found beneath American soil.
At current levels, you can pick up shares of CVX at about 10 times forward earnings and capture the impressive $1.00 payout every quarter for some additional income. That’s pretty cheap valuation to pay for one of the top dividend stocks out there.